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Wednesday, May 14, 2008
Ex-Carlsbad Stockbroker Resentenced for Fraud
Associated Press
CARLSBAD — A couple of years have been shaved off the prison sentence given to a former Carlsbad stockbroker accused of bilking retired potash workers out of more than $600,000.
State District Judge J. Richard Brown on Tuesday resentenced R. Gene Hornbeck to 10 years in prison for fraud, securities fraud and sale of unregistered securities.
Hornbeck will receive credit for time served and good time earned since he was originally sentenced Sept. 30, 2005, to 12 years in prison.
A state district court jury had convicted him on July 30, 2005, of embezzlement of more than $20,000, fraud of more than $20,000, securities fraud and sale of unregistered securities.
But the New Mexico Court of Appeals earlier this year tossed out the embezzlement conviction.
The appeals court ruled the embezzlement and fraud charges were mutually exclusive and that while Hornbeck could be charged with both, he could be found guilty of only one.
Hornbeck took a $600,000 check from the Potash Corporation of America's Retirees Trust to invest in a trading account in June 2001, according to court documents. Interest on the transaction was expected to earn the trust more than $90,000.
Hornbeck gave trustees a promissory note and paid monthly interest payments beginning in July 2001, but the payments stopped the next spring, the documents said.
According to a promissory note, Hornbeck was to invest the funds for PCA into a trading account. But witnesses for the state testified the PCA check was deposited under Hornbeck's name in a Texas bank.
Retired potash miners sued, contending a balance of $615,000 was due.
"I had a market running against me and I was stubborn," Hornbeck said Tuesday during his resentencing. "I was arrogant with the market.
"The promissory note, the loan, was illegal. I should have known that wasn't the thing to do," he said. "And the rest came down like a house of cards."
Roy Hall, a retired potash miner and a trustee, said Hornbeck "had our total confidence when he approached us regarding the $600,000 investment loan."
"He made those first 10 (interest) payments to us, but now I know that he made those 10 payments with our own money," Hall said.
George Bartlett, another trustee, told the court that Hornbeck "should be held accountable for the years (on his sentence) that he has left."
"One of the things that bothers me is that I never heard Gene Hornbeck say, 'I'm sorry, I made a mistake, I committed a crime,'" Bartlett said. "He never admitted any guilt. He never showed any remorse. He was arrogant."
The $600,000 eventually was returned to PCA as part of a settlement with Financial Network Investment Corp., a company with which Hornbeck had been associated and which had been accused of failing to properly supervise him in his handling of the money.
Copyright ©2008 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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